CABA Information Series

(IS-2011-145) Report on Transmission Cost Allocation for RTOs and Others

This report from the U.S. Department of Energy examines cost allocations models for electricity transmission systems. Allocating costs is complicated because transmission lines may cover multiple regulatory jurisdictions and possibly independent generating companies. About $10 billion per year will be spent to grow the transmission network 8% by 2018. Various costing methods are presented. The U.S. Federal Energy Regulatory Commission (FERC) is likely to support “beneficiary pays” transmission cost allocation.